I usually try to understand the context of the negotiation and the type of contract that we are entering into, because that determines the type of arbitration clause I want to draft. In order to do this, you need to understand not only the complexities of the deal at hand, but also the nature of the parties. For instance, multinational companies subject, as most are, to codes of conduct are keen to comply with contracts, while individuals, or sole owners can be mavericks and often try to litigate on every minutia.

Also, in preparing to do the drafting, one has to consider which party has a higher bargaining power. If my client is entering into a contract with an equal, and we are not necessarily the ones controlling the contract, then we have to draft and tailor the arbitration clause to favour both parties. In those cases, I often try to convince the other party to create mechanisms or means of mediation for quick, amicable settlement procedures designed to deal with specific issues in the contract that are not worthy of arbitration.

For instance, the agreement may have to deal with some technical questions. I would persuade the opposing counsel to create alternative disputes resolution, i.e., expert determination or mediation, where the parties may agree to settle instead of arbitrating. My reasoning is that typically the parties wouldn't want the contract to be in danger of surviving because of a technical issue that they can set aside its determination and/or solution without hampering the remaining clauses of the contract, by means of a cost-efficient, quick resolution to the conflict.

Also, if my client would like to have expedient resolution to any arbitration and would like to enforce any judgment quickly, I would design a simple arbitration clause aiming towards flexible and quicker approaches, for example having one sole arbitrator, limiting the number of hearings and waiving any rights to appeal or challenge, so that we can go in and enforce it quickly.

If, otherwise, in dealing with the clause drafting, I feel that by the nature of my opposing party, and/or the type of contract my client is signing, the other side may have a higher tendency to litigate and sue my client, then I will draft a more complex agreement. This will include very formal and comprehensive provisions, such as a requirement to deal with three arbitrators, a more detailed procedure, possibilities to maintain the contract while arbitration is in place, possible recovery of damages, or obligations to pay lawyers’ fees. This has the purpose of making it more expensive and costlier to the losing party. The goal would be to discourage the other party from pursuing a frivolous arbitration.


Florida law generally permits enforcement of written contracts that have fee-shifting provisions in them in the event of a dispute.

That can be in litigation or arbitration, however it has to be in the contract as an explicit agreement.

Costs in Europe generally mean attorney’s fees, while in the USA it refers to hard costs, such as court filings, court reporters and the like.

Designating the forum in the contract brings with it a lot of considerations. It is really specific to that particular party, and there is no right or wrong answer. Let’s say you have a party coming from Latin America and one from Canada. Very often the parties agree to have the dispute heard in a third-party venue such as the US, because nobody likes to feel they are in the other person’s home town.

Third party designated venues are very common, and forum rules will apply so you have to be very careful how you select the jurisdiction.

When it comes to mandatory mediation clauses, I am generally opposed to including them in a contract for arbitration. I love mediation, but typically it is used as a condition to commencing arbitration. If the parties must first go to mediation, it can create a big problem because the other side can play games to avoid arbitration by delaying mediation. This will hinder the ability to get the arbitration started and may jeopardize things like statute of limitations for filing.


One of the most important issues to take in to account when drafting an arbitration clause, is that arbitration is generally considered as an alternative to the general judicial jurisdiction. This is a clause that operates by exception, and it needs to be very clear and precise in terms of making sure that all facets that the contract represents are subject to alternative dispute resolution (ADR).

If they are not, you run the risk of entering into an endless dispute in court, where the other party wants to resist any arbitration procedures.

You need to provide clearly, which is the subjective and procedural law, the language used, the seat of arbitration and how to deal with the costs. Confidentiality is important, since one reason to go to arbitration, is to avoid a case being open to the public.

We are generally resistant to mediation, but we do favor the fostering of amicable negotiations in a very short and clear timeframe before the arbitration. Giving the parties a chance to present their case, is a mechanism to avoid litigation.


Exchange of information, understanding and advice.

Having said that, in the best interest of clients, there are interesting variables that are not often taken into account.

It is, for instance possible to provide an alternate clause, by which the parties agree that the first one to submit a dispute may decide between court proceedings and arbitration. The parties will be free until the very last moment to select their warpath. Electa una via, altera non datur.

Another option, for instance, is to set a threshold related to the claim, below which State Courts will be competent and beyond which arbitration will be initiated.

As mentioned earlier, arbitration is based on the common intent of the parties.


My best practice approach is to insist upon ad-hoc arbitration (which saves costs for my client) and also to ensure the seat of arbitration is the same jurisdiction as my client’s place of incorporation or place of business. If the opponent refuses to agree on the seat of arbitration, I would suggest the seat of arbitration be closer to my client, which would be more convenient to conduct arbitration.


Properly developing the arbitration clause in a contract is half the battle in its success, when one goes to arbitration. What I attempt to do, is look at a potential dispute and what the parties have actually entered into a contract to accomplish. Then I advocate for specific jurisdictions where the law of the case would be the most beneficial.

It also depends on the issues that might be involved, as to where an arbitration would be most advantageous. For example, if I have a client in a banking or commercial transaction, it is more than likely that I will advocate that New York law should apply, because that jurisdiction has decades of case law involving these specific financial areas.

Or, if it is in the insurance or surety industry, I might advocate for a jurisdiction in the Midwest, such as Illinois or Michigan. This location is where the insurance industry is based and usually originated, hence they have vast amounts of case law available to assist in adjudication.

If a dispute between parties involves intellectual property (IP), I might suggest that the laws of California be utilized, because that jurisdiction has substantial case law on matters relating to IP. These are some of the details that I look for as part of the arbitration process.

When it involves the actual arbitration, I try to find a location that is convenient for my client. It is also necessary to be able to draw from a pool of arbitrators with experience in the legal field needed.

I always prefer that the physical arbitration take place in the state in which my client is located, but often we have to find common ground and travel becomes a necessity.

Arbitration clauses usually include a fee arrangement, ensuring the prevailing party is entitled to its costs and expenses. this fee arrangement is an incentive for clients and allows the parties to take pause before they commence the arbitration process, to ask whether their case is strong enough to give them favorable odds.

Another key provision I try to include in an arbitration clause, is an agreement that the prevailing party is entitled to damages as a result of the contract, but not to extraordinary or punitive damages. This limitation eliminates the threat or allegation of fraud or conversion as a way of a party to claim extra damages. In these matters the contract in dispute is a commercial transaction and should be treated accordingly.

When it comes to locating appropriate arbitrators, my main goal in locating a beneficial arbitrator is experience. I do not mind using an arbitrator who is neither an attorney nor a judge. A designer or engineering expert with a practical viewpoint can be a positive arbitrator for the right type of dispute.

I am also becoming a greater advocate for mandatory mediation clauses, which can provide a better result than arbitration. I’m not sure if this approach is appropriate for larger complex cases, where both parties believe they are due large sums, but these mandatory medication clauses are often effective if the amount in play is smaller.


Our experience is that arbitration agreements generally tend to include insufficient detail.

In addition to the choice of law considerations that Matthew outlined, one of the things that avoids constant referral to the local courts to supervise the arbitration is some reference to procedural rules. There are very few rules in the TCI Arbitration Ordinance, as applied to domestic and international arbitrations.

So, unless you incorporate some form of procedural rules, by reference to institutional rules or local rules of court, you can spend an inordinate amount of time, and therefore cost, dealing with procedural issues, meaning you may have been better off choosing litigation rather than arbitration.

Properly drafting the arbitration clause is half the battle. All too often I have seen insufficient thought put in to that, with clauses that simply say: “any disputes in connection with or arising out of this agreement shall be resolved by arbitration.” In this regard I agree entirely with what Gary says about the need for transactional lawyers to include dispute resolution lawyers in the drafting of the arbitration or other ADR agreement.

Anybody who has a commercial transaction practice knows that the parties, at the initial stage, just want the deal to get done. The best time to reach agreement on how to resolve any dispute is when the parties are about to do a deal. Trying to reach agreement once the parties are fiercely in dispute, is not the time to deal with procedural issues or agreements on resolving a dispute, particularly if one party is taking an antagonistic position.


One important aspect is the language of proceedings, which has to be determined before.

In international proceedings, its mainly English, but in national arbitrations, we will choose the common language of the parties. We have already talked about the applicable law to the arbitration and, as such, the seat of arbitration must be taken into consideration.

With regard to the number of arbitrators, for most cases, a three-member arbitrary tribunal is probably the best choice. You then must distinguish between which arbitration institution you want to use.


I agree that the choice of institution is a very important aspect. That's one of the questions you want to consider first hand, including whether or not you're going to go ad-hoc or use an institution to administer the proceedings.

On some occasions, if arbitrators are called on to administer themselves, they may ask for spectacular hourly rates. However, overall, ad-hoc tends to be less costly. When it comes to institutions, very often the cost aspect is important to clients, so you may choose one of the smaller forums as opposed to ICC or LCIA.

It's very easy nowadays to check out the applicable fees consisting of the administrative fees of the institution plus the arbitrator's fees. You simply type the amount in dispute into the cost calculator and the overall envisaged procedural costs are displayed.

With regard to the quality of administration, the well-established ones can be relied on, because they have very experienced and hardworking counsel. They are of great assistance to arbitrators and counsel when it comes to procedural issues.

They remain in regular contact and make sure there is no misunderstanding, no traps or loopholes.

Less experienced institutions are cheaper, but not as professional, reliable or responsive.

As far as clauses are concerned, in 95 per cent of matters, I use institutional clauses rather than draft them on my own in favor of the client. Drafting would be the exception from the rule.

There are standard template clauses available with each institution, and you just go with those. If parties want to add additional regulations to the clauses, they must be very careful because they take the risk of making this an issue later on.

Poorly drafted arbitration clauses create a dispute of their own and you can go over jurisdictional questions for months. Sometimes a jurisdictional hearing is required to clarify and decide whether or not a tribunal is competent to hear the matter.